When is a Movie a Success?

I was reading a report about this summer’s box office busts and a surprising title was listed: Pacific Rim. True Pacific Rim did not light up the North American box office, but it made over $400 Million world wide in box office receipts, so I have decided to dig in to this number a little more and see what it means to truly decide if Pacific Rim was a bust or not.

First off lets break apart that $400 million. Just over $100 million came from North America, and about $110 million came from China. The remaining $190 million from the rest of the world. In most parts of the world the studios take 60% of the receipt price with the remaining 40% going to the theater, but in China the studios only take in 25%. This is because piracy is rampant in China, so the ticket price has to be low for people to go to the movies. Over all Legendary/Warner Bros took in $174 million from most of the world, and only $27.5 million from China, but still that is $201.5 million, not bad for a box office bust, but there is still more to dig in too.

The budget for the movie is estimated at $190 million. That means the studio has only cleared $11.5 million, and of that they are still probably paying for the advertising costs which are usually about a quarter the budget of the film, so in this case it would be about $50 million, so the studios are still in the hole about $38.5 million dollars. That sounds bad, but there is still money on the table.

The movie has yet to come out on home video. This used to be a major earner for films, but as streaming video and the internet has taken off, fewer people are ponying up for the price of a DVD or Blu-Ray. Still, $38.5 is well within reach, and they still get to sell the TV rights to various TV stations around the world, plus random merchandising like comic books, t-shirts, and toys. This movie will make a small amount of money, and considering the make or break nature of the film business, I bet a lot of executives are happy about that.

But the major money maker is still to come: the sequel. Very rarely does the first movie in a franchise make tons of money. Batman Begins only took in $375 million world wide, and sure that was eight years ago, and it didn’t have the China tax, but still had they stopped there Warner Bros would have walked away from billions. The reason is, as much as people complain about sequels and the lack of creativity, they like a sure thing. Once a movie has proven it is good and worth their money usually the second and third movies make bank.

In the end I think Pacific Rim was a success, critically and financially, and it makes sense why Guillermo del Toro is talking sequel, so if anyone else wants to call Pacific Rim a bust they should look at the numbers first.